by Ram Charan
An exceptional business primer from an exceptional business consultant. Ram Charan takes us back to the business basics: customers, cash, return on invested capital, and growth. He helps the reader understand, work with, and improve on the fundamentals of business.
Jac Nasser, the former Ford CEO, gave Charan the idea for What the CEO Wants You to Know. Charan was teaching a couple hundred Ford managers about the bigger picture of business. When Nasser sat in on session, he recognized the importance of the topic for every member of the company and encouraged Charan to capture what he was saying on paper.
What the CEO Wants You to Know is for everyone who "wants and needs a greater understanding of how their organization really works." That said, Charan focuses on millennials and the business-to-business (B2B) salesforce due to generational and business trends.
As a pastor, nobody ever taught me this stuff when I was in school. How I wish they had. Seasoned CEO's may find this a helpful tool to share with their workforce, though the ideas presented are their everyday mastery.
Here are 5 of my highlights:
1. Priorities: "Superior CEOs take care to define three priorities that will, in combination, take the business where they want it to go, and devote nearly all their time and attention to those priorities." Charan explains why fewer priorities are better priorities.
2. Simplification: If cash generation, gross margin, COGS, ROIC, a company's P/E multiple, income statements, and balance sheets are a foreign language to you, this book is for you. Charan cuts through the seeming complexity of business finance by providing clear explanations of the essential numbers and processes with simple formulas to help break them down.
3. The Growth Box: This simple tool for spotting new opportunities was worth the price of the book. See page 63.
4. Coaching: Chapter 8, "Expanding Capacity Through Flawless Execution" was also worth the price of the book. His portion, "Coaching on the Business Side" was extremely practical, Charan pointing out a significant flaw in my own coaching. On receiving constructive criticism: "Listen with your ego turned off." So good!
5. 2 Cents: Ram Charan helped me understand why 2 cents matters and why it should matter to every person in the company. See chapter 6.
As noted, if you are a seasoned CEO this is more a tool to share than a course to take. Folks who want to better grasp the inner workings of business, read financial analysis, or improve their basic approach to business in the for-profit or non-profit sectors will find this a helpful means for improving business acumen.